PSR, FCA seek information on Big Tech and digital wallets

The Payment Systems Regulator (PSR) and the Financial Conduct Authority (FCA) have launched a joint call for information on Big Tech and digital wallets, as their popularity among consumers increases.

According to the PSR and FCA, it is likely that more than half of adults in the UK now use a digital wallet, with Apple Pay, Google Pay and PayPal being the three most widely used.

As such, the regulators are seeking views on the benefits and risks of digital wallets from stakeholders across the payments and wider financial services landscape, including digital wallet and technology providers, as well as their service users.

In addition to the range of benefits that digital wallets bring for service users, they are seeking views on whether there are any features that mean payments do not work as well as they could for consumers and businesses.

The regulators are also keen to understand the role of digital wallets in “unlocking the potential” of account-to-account payments.

The information gathered by the regulatory bodies will also inform their understanding about whether digital wallets could raise any significant competition, consumer protection or market integrity issues, either now or in the future.

David Geale, the PSR’s managing director said: “Digital wallets are steadily becoming a go-to payment type and while this presents exciting opportunities, there might be risks too.

“Collaboration between regulators and working with industry is crucial to ensure we’re on the front foot to support innovation and competition, making sure everyone benefits from access, protection and choice in payments.”

The PSR is particularly interested in understanding how consumers’ choice of payment options at checkout are affected by the rise of digital wallets.

Nikhil Rathi, chief executive officer of the FCA, said a “seismic shift” in how people pay is underway in the UK.

“We want to make sure we can maximise the opportunities and benefits for consumers and businesses while protecting against any risks this technology may present. The regulators will consider all feedback received and provide an update by Q1 2025,” he added.

The call for information is open until 5pm on Friday 13 September.

On 23 May this year, Parliament passed the Digital Markets, Competition and Consumers (DMCC) Bill which introduced reforms to the UK’s consumer, digital markets and competition regimes.

The Bill gives the CMA’s Digital Markets Unit (DMU) powers to enforce a new regulatory regime for firms in digital markets that have “strategic market status”.

The PSR’s David Geale is speaking at Open Banking Expo UK and Europe on 15-16 October in London – find out more about the speaker line-up and agenda here.